- The Washington Times - Tuesday, April 9, 2002

To offset the big price tag of improving civil service benefits, groups representing active and retired feds are seeking a tax break, and guaranteed cash for their health insurance premium.
They want Congress to approve a federal tax decution or tax credit on the new Federal Long Term Care Insurance program.
Currently, 15 states (including Virginia and West Virginia) provide deductions for LTC premiums, and seven others (including Maryland) provide a tax credit. The deduction is given on the federal adjusted gross income used to calculate state tax. A credit gives taxpayers a credit against state income tax (capped at $500 in Maryland).
LTC care policies now range from a few dollars a month for the young and healthy to hundreds of dollars a month for older people who qualify. LTC premiums in the private sector and in the government program are the sole responsibility of the policy-holder. That isn't going to change.
Administration officials hope the new Federal Long Term Care Insurance program with 20 million federal and military eligibles will prompt more local governments and private companies to offer packages to workers. That could shift the cost of home care and nursing home care from government to insurance companies.
Meanwhile, lobbyists for postal employees and feds are working hard to guarantee that the federal government continues to pay 72 percent of the total premium for health insurance, which is even higher for unionized postal workers.
Many congressional Republicans favor a system that would give employees vouchers or let them set up medical savings accounts to pay health care costs. Backers say it would let people provide their own managed care.
Opponents say it would cause lower-income feds (and especially retirees) to skimp on health care needs.

The Bush administration has found an impressive array of bipartisan allies for its proposed civil service reforms. But most of the heavy hitters who have signed on to the idea of a brave new civil service are in the Democratic-controlled Senate.
Support in the House, especially for an open-ended, governmentwide buyout program is less strong. Many Republicans believe the government paid too many people $25,000 to do what they were going to do anyway retire.
They also suspect the buyout program was used to lure older white males to retire so the government could downsize and protect the administration's diversity numbers and the jobs of minorities and women.
The plan would authorize a permanent governmentwide buyout program (with buyouts still limited to $25,000 before deductions), and inducements to permit agencies to hire people quicker at higher salaries.

TSP investing
The nearly $50 billion that federal/postal investors have in the G-fund of their Thrift Savings Plan will be invested at 5.625 percent for the month of April. Last month it was 5.125 percent.
Because the special Treasury securities that make up the G-fund are guaranteed by the government and never have a loss the G-fund makes even the safest investment option of most other 401(k) plans seem like a moderate to high risk.

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